Despite the increased interest in voluntary services cooperation, little is known about the factors that encourage local governments to enter into collaborative services arrangements with each other. This paper addresses this question through an analysis of interlocal contracting arrangements for police and fire services reported by 464 local governments in Michigan. While the contracting of public services is increasing common in local governments across the country, collaborations on police and fire services have proved far more difficult to achieve. Public safety contracting presents a dilemma for public managers. On one hand, local governments devote a substantial part of their budgets to police and fire, and public safety employees may approach 25 percent of the unit’s workforce and 40 percent of its total payroll. Given the importance of public safety expenditures in the budgets of local governments, it may be impossible to reduce the costs of local government without reducing spending on police and fire services. Yet the fear of lost jobs and lower quality services will often make contracting for police and fire highly controversial in the community. Also, collaborations involving police and fire services may become entangled with the “politics of place.” Unlike other services areas where the contractor may be a private or nonprofit organization, public safety contractors are other local governments, and the baggage of past conflicts and rivalries attach to the issue. We group the factors expected to influence the incentives and feasibility of local governments to collaborate on public services into the following categories: the organization of local governments in the county and variations in the unit’s administrative structure, community demographics, and the fiscal capacity of the local unit. Using logistic and negative binomial regression, we analyze the effect of these factors on the frequency and extent of cooperation reported for police and fire services. We find important differences in the role played by these factors in the frequency and extent of cooperation reported across the two different service areas and within the different types of local units (city, village, and township).